MADISON (WKOW) -- Attorney General J.B. Van Hollen announced on Monday that he and 31 other states reached a $3 million settlement with VONAGE, one of the nation's largest Internet-based phone service companies. The settlement comes after a two-year multi-state investigation led by the State of Wisconsin. Wisconsin will receive $408,000 from the settlement.
The settlement, which becomes effective after the entry of a Consent Judgment by the Dane County Circuit Court, also requires VONAGE to make significant changes to its marketing practices and honoring of consumer cancellation requests. The settlement also requires VONAGE to provide extensive refunds to eligible consumers.
"Companies who make representations about price and service need to make those representations clear and hold up their end of the bargain," said Wisconsin Attorney General J.B. Van Hollen. "Today's agreement with Vonage requires disclosures to prevent future communication breakdowns and ensures that consumers who are owed money are paid."
The settlement addresses complaints where consumers alleged having difficulty or being unable to cancel their VONAGE service. VONAGE previously paid incentives to customer service representatives for retaining or "saving" customers instead of canceling services when consumers called to cancel. As a result, consumer reported that cancellation was extremely difficult and sometimes impossible. The new agreement puts strict limitations on the practice and requires recording and verification of these telephone calls.
The settlement also addresses a number of other marketing practices, which have led to consumer confusion about the costs associated with VONAGE equipment and service. Specifically, VONAGE will be revising it disclosures regarding offers of "free" services, money back guarantees, and trial periods for services.
The settlement also puts into place a broad restitution plan that requires VONAGE to refund money to eligible consumers who filed complaints with the Attorney General's office or Wisconsin Department of Agriculture, Trade and Consumer Protection about unauthorized charges. Complaints made starting in January 2004 up until 120 days after the effective date of the settlement are eligible. Wisconsin residents who have not submitted complaints, but believe they are eligible for refunds should file a complaint by downloading a claim form or by completing one online by clicking here. Consumers can also call (608) 266-8940 Monday through Friday between 8:00 a.m. and 5:00 p.m. to request a form by mail.
The investigation of the case was led by Wisconsin and six other states including Connecticut, Illinois, Michigan, Oregon, Pennsylvania, and Texas. Other participants in the settlement include Alabama, Arizona, Arkansas, Florida, Hawaii, Idaho, Indiana, Kansas, Louisiana, Maine, Missouri, Montana, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, South Carolina, South Dakota, Tennessee, Vermont, Washington, West Virginia, and the Commonwealth of Kentucky.
Assistant Attorney General Lara A. Sutherlin represented the State in this case. Investigative assistance was provided by the Wisconsin Department of Agriculture, Trade and Consumer Protection.